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Alberta government touts province as Arctic gas hub
Gary Park
Alberta government energy officials have embarked on talks with North Slope producers and Alaska state officials about Alberta’s hopes of developing a “hub” for Arctic gas, says Stan Wenger, Alberta assistant deputy minister of energy.
But for now, Alaska’s focus is more on making the project economic and keeping the tolls “as low as possible,” he told a Calgary conference Nov. 22.
The hub proposal has also been discussed with various parties in Canada, including the pipeline companies, and they are “all on side,” he said.
Wenger said a gas hub is vital to “unlocking the potential of northern gas,” by offering all producers access to a wide-range of possible markets.
Although a final decision is up to the private sector, the government’s role, he said, will be to streamline procedures and remove any regulatory roadblocks.
Wenger argued Alberta is strongly positioned to operate as the distribution center for 5 billion cubic feet per day of North Slope and Mackenzie Delta gas.
He said the province has an extensive internal gathering and transportation network operated by Nova Gas Transmission that is connected to all of the major North American markets and its AECO hub is the third largest gas trading market in the world.
Arctic gas will be vital for U.S. security of energy supply, especially if North American demand for gas grows as predicted to 88 billion cubic feet per day by 2010, with about 23 billion cubic feet per day coming from the Western Canada Sedimentary Basin, Wenger said.
High-pressure line to Edmonton The plan being touted by the Alberta government includes a high-pressure line carrying liquids-rich gas from Alaska to the Fort Saskatchewan area, just outside Edmonton.
At that point, producers could remove the natural gas liquids if that was economic, leaving the gas to be delivered to North American markets through existing underutilized pipelines, expanded pipelines or possibly a new “bullet” line directed to the United States. To deal with the increased carbon dioxide emissions that would result from a hub, Wenger said talks are under way aimed at reclassifying CO2 from a waste product to a commodity that could be used for power generation as well as by oil sands operators.
Of the existing systems, TransCanada PipeLines Ltd. could boost capacity on its mainline system to Eastern Canada and the United States by 1.5 billion cubic feet per day, while the three-year-old Alliance pipeline from northern British Columbia could be increased to 2.5 billion from 1.5 billion cubic feet per day, said Wenger. Other systems could offer capacity of 500 million cubic feet per day, while a brand new line could be built to handle 1 to 2 billion cubic feet per day.
TransCanada has already said it is weighing a northern corridor that could carry gas from the Mackenzie Delta to Fort McMurray in northern Alberta, where it would be used as feedstock for the oil sands region.
Gas could grow Alberta industry Bill Onn, an executive with Marenco Energy Associates, told the conference that Arctic gas could spur further petrochemical development in Alberta — also an option being discussed in Alaska.
Volumes of up to 5 billion cubic feet per day would yield as much as 150,000 barrels per day of ethane and another 80,000 barrels per day of propane, an increase of 30 percent to 40 percent over current volumes, he said. BP Canada Energy Co., which operates an Edmonton-area petrochemical plant and whose parent company has a 30 percent stake in North Slope gas, suggested earlier this year that Alberta could evolve into a major hub for gas marketing and futures if it could grow a continental chemicals industry.
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